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International Data Systems' information on revenue and costs is relevant only up to a sales...

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Accounting

International Data Systems' information on revenue and costs is relevant only up to a sales volume of 106,000 units. After 106,000 units, the market becomes saturated and the price per unit falls from $16.00 to $9.80. Also, there are cost overruns at a production volume of over 106,000 units, and variable cost per unit goes up from $8.00 to $8.50. Fixed costs remain the same at $56,000.
a. Compute operating income at 106,000 units.
Operating income
b. Compute operating income at 206,000 units.
Operating income
Sterling Optical and Royal Optical both make glass frames and each is able to generate earnings before interest and taxes of $180,000. The separate capital structures for Sterling and Royal are shown here:
\table[[,Royal],[Debt @ 12%,$900,000,Debt @12%,$300,000
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